We examine the effect of corporate asset-backed securitization on managerial compensation. We find that CEO … compensation increases after securitization of corporate assets, which is consistent with two distinct theoretical views: (1) asset …-backed securitization improves the efficiency of performance-based compensation as corporate performance becomes a better signal of …

. Recent research has used variation induced by these rules to investigate the connection between securitization and lender … perapplicant fixed costs in screening. We then demonstrate that our theory fits the data better than the main alternative theory … already in the literature, which supposes cutoff rules are exogenously used by securitizers. Furthermore, we use our theory to …